Promised benefits must be paid; period. While this article/decision primarily refers to future health benefits being promised, retirement benefits are clearly promised in the employee handbook. Therefore, retiree pension benefits cannot be cut. Services, whatever they may be, will be cut first.

"This decision says that when you are in the process of doing public employee pension reform, you have to respect the rights of current retirees," said Ernest Galvan, a lawyer who represented more than 5,000 Orange County retirees and their family members.

"If you promised them a particular benefit when they were working and promised that would be part of their retirement, then that is a promise you have to keep."

My tax bite is roughly 10% to California. For every dollar I make, ten cents goes to Sacramento. (Yes, I get a benefit from that in that state income tax is deductible on federal tax. However, because of the Alternative Minimum Tax even that benefit is capped.) For the past few years I’ve considered if I could move my business to a friendlier environment. Earlier this year, I decided to do so.

I’ve sold my house in Irvine, and am in the process of purchasing a home in the Las Vegas area. I will be in a much friendlier business environment, with a lower cost of living. The home I’m purchasing is nearly double the size of my current home and costs almost 50% less than what I sold my current home for.

There comes a point where decisions are forced on you. With the growth of my business, I looked at possibly hiring another tax accountant in 2010. When I ran the numbers, I found that I would lose money by hiring a productive tax accountant. That’s because of all the regulations and costs that I would immediately incur if I had an employee. I’m not stupid: If I lose money by hiring someone, I’m not going to do it.

Yet my business was (and is) growing, and I had to do something. ... As of a week from now, I will have executed my own Escape from California.

Tax Update Blog:

Russ doesn't say that taxes are the only reason he is leaving California. He is saying that high taxes are a significant part of why California is business-hostile. When things are bad enough to drive a growing business from the perfumed air and divine weather of Orange County to the desert wastes of Nevada, that's saying something.

Feb. 26 (Bloomberg) -- On a cloudless December day in the Nevada desert, workers in white hard hats descend into a 30- foot-wide shaft next to Lake Mead.

As they’ve been doing since June, they’ll blast and dig straight down into the limestone surrounding the reservoir that supplies 90 percent of Las Vegas’s water. In September, when they hit 600 feet, they’ll turn and burrow for 3 miles, laying a new pipe as they go.

The crew is in a hurry. They’re battling the worst 10-year drought in recorded history along the Colorado River, which feeds the 110-mile-long reservoir. Since 1999, Lake Mead has dropped about 1 percent a year. By 2012, the lake’s surface could fall below the existing pipe that delivers 40 percent of the city’s water.

As Las Vegas’s economy worsens, the workers are also racing against a recession that threatens the ability to sell $500 million in bonds so they can complete the job.

Patricia Mulroy, manager of the Southern Nevada Water Authority, is the general in this region’s war to stem a water emergency that’s playing out worldwide. It’s the biggest battle of her 31-year career.

‘We’ve Tried Everything’

“We’ve tried everything,” says Mulroy, 56, who made no secret of her desire to become secretary of the U.S. Interior Department before President Barack Obama picked U.S. Senator Ken Salazar of Colorado in December.

“The way you look at water has to fundamentally change,” adds Mulroy, who, after 20 years of running the authority, said in January she’s ready to start thinking about looking for a new job, declining to say where.

Across the planet, people like Mulroy are struggling to solve the next global crisis.

From 2500 B.C., when King Urlama of Lagash diverted water in the Tigris and Euphrates Valley in a border dispute with nearby Umma, to 1924, when Owens Valley, California, farmers blew up part of the aqueduct that served a parched Los Angeles, societies have bargained, fought and rearranged geographies to get the water they need.

Mulroy started her push with conservation. She’s paying homeowners $1.50 a square foot (0.09 square meter) to replace lawns with gravel and asking golf courses to dig up turf. That helped cut Las Vegas’s water use by 19.4 percent in the seven years ended in 2008, even as the metropolitan area added 482,000 people, bringing the total to 2 million. It wasn’t enough.

Paul Bunyan

So she’s planning a $3.5 billion, 327-mile (525-kilometer) underground pipeline to tap aquifers beneath cattle-raising valleys northeast of the city. She’s even suggested refashioning the plumbing of the entire continent, Paul Bunyan style, by diverting floodwaters from the Mississippi River west toward the Rocky Mountains.

If Mulroy’s ideas are extreme, one reason is that the planet’s most essential resource doesn’t work like other commodities.

There’s no global marketplace for water. Deals for property, wells and water rights, such as the ones Mulroy must negotiate to build the pipeline, are done piecemeal. As the world grows needier, neither governments nor companies nor investors have figured out an effective and sustainable response.

“We have 19th-century ways of utilizing water and 21st- century needs,” says Brad Udall, director of Western Water Assessment at the University of Colorado at Boulder.

Unyielding Pressure

Water upheavals are intensifying because the population is growing fastest in places where fresh water is either scarce or polluted. Dry areas are becoming drier and wet areas wetter as the oceans and atmosphere warm. Economic roadblocks, such as the global credit crunch and its effects on Mulroy’s attempts to sell bonds, multiply during a recession.

Yet local governments that control water face unyielding pressure from constituents to keep the price low, regardless of cost. Agricultural interests, commercial developers and the housing industry clash over dwindling supplies. Companies, burdened by slowing profits, will be forced to move from dry areas such as the American Southwest, Udall says.

“Water is going to be more important than oil in the next 20 years,” says Dipak Jain, dean of the Kellogg School of Management at Northwestern University in Evanston, Illinois, who studies why corporations locate where they do.

No Cheap Water

Even before the now decade-long drought began punishing Las Vegas, people used more than 75 percent of the water in northern Africa and western Asia that they could get their hands on in 2000, according to the United Nations.

In 2002, 8 percent of the world suffered chronic shortages. By 2050, 40 percent of the projected world population, or about 4 billion people, will lack adequate water as entire regions turn dry, the UN predicts.

“We can no longer assume that cheap water is available,” says Peter Gleick, editor of The World’s Water 2008-2009 (Island Press, 2009). “We have to start living within our means.”

Over the Sierra Mountains from Las Vegas, Shasta Lake, California’s biggest reservoir, is less than a third full because melting snow that fed it for six decades is dwindling. A winter as dry as the previous two may mean rationing for 18 million people in Southern California this year, says Jeffrey Kightlinger, general manager of the Metropolitan Water District.

Sent by a friend. I leave in his prefacatory comments.======So let me get this straight. A business can't spend its advertising money where it chooses? Political groups and legislators can force them to spend it where they don't want to? Ahhhh, California slips deeper into the void where idiocy meets lunacy.

In this undated image provided by Discovery, Nawal Aoude, a pediatric respiratory therapist, left, and her husband Nader go for a walk in a scene from the TLC series, "All-American Muslim."

LOS ANGELES – A state senator from Southern California was considering calling for a boycott of Lowe's stores after the home improvement chain pulled its advertising from a reality show about Muslim-Americans.

Calling the retail giant's decision "un-American" and "naked religious bigotry," Sen. Ted Lieu, D-Torrance, told The Associated Press on Sunday that he would also consider legislative action if Lowe's doesn't apologize to Muslims and reinstate its ads. The senator sent a letter outlining his complaints to Lowe's Chief Executive Officer Robert A. Niblock.The retail giant stopped advertising on TLC's "All-American Muslim" after a group called the Florida Family Association complained the show was "propaganda that riskily hides the Islamic agenda's clear and present danger to American liberties and traditional values."

The program premiered last month and chronicles the lives of five families from Dearborn, Mich., a Detroit suburb with a large Muslim and Arab-American population.

"The show is about what it's like to be a Muslim in America, and it touches on the discrimination they sometimes face. And that kind of discrimination is exactly what's happening here with Lowe's," Lieu said.

The Florida group sent three emails to its members, asking them to petition Lowe's to pull its advertising. Its website was updated to say that "supporters' emails to advertisers make a difference."

Suehaila Amen, whose family is featured on "All-American Muslim," said she was disappointed by the Lowe's decision."I'm saddened that any place of business would succumb to bigots and people trying to perpetuate their negative views on an entire community," Amen, 32, told The Detroit News on Sunday.

Lowe's issued a statement Sunday apologizing for having "managed to make some people very unhappy." The North Carolina-based company did not say whether it would reinstate advertising on the show.

The apology doesn't go far enough, Lieu said. The senator vowed to look into whether Lowe's violated any California laws and said he would also consider drafting a senate resolution condemning the company's actions."We want to raise awareness so that consumers will know during this holiday shopping season that Lowe's is engaging in religious discrimination," he said.

In addition to an apology and reinstatement of the ads, Lieu said he hoped Lowe's would make an outreach to the community about bias and bigotry.

A call to Lowe's headquarters seeking comment about the boycott threat was not immediately returned Sunday.

"Individuals and groups have strong political and societal views on this topic, and this program became a lightning rod for many of those views," the company's statement said. "As a result we did pull our advertising on this program. We believe it is best to respectfully defer to communities, individuals and groups to discuss and consider such issues of importance."

Lieu's office said a decision was expected Wednesday or Thursday on whether to proceed with the boycott.Dawud Walid, Michigan director of the Council on American-Islamic Relations, said his group felt "extreme disappointment" at Lowe's "capitulation to bigotry."

Walid said he has heard expressions of anger and calls for a boycott by Muslims but said a key to resolving the Lowe's advertising controversy will be how non-Muslim religious leaders and others react to Lowe's decision.

"I will be picking up the phone tomorrow to some of our friends and allies to explain the situation to them," Walid said Sunday.

By VAUHINI VARA SAN FRANCISCO—California's ambitious plan for a high-speed rail system hit a big roadblock Tuesday, as an independent panel urged lawmakers to deny authorizing the issuance of $2.7 billion in bonds to kick off the $98.5 billion project.

The California High-Speed Rail Peer Review Group—which the state legislature appointed to analyze funding for the rail system—questioned the California High-Speed Rail Authority's plan to start construction without any assurance of future funding from the federal government, among other factors.

Moving ahead "represents an immense financial risk" for California, the group said in its report, echoing concerns from critics who say the project could leave state taxpayers on the hook for billions of dollars in future costs. The panel appeared to leave the door open to supporting state funding in the future, if the rail authority addresses its concerns. While the report isn't binding, it puts pressure on California lawmakers as they decide whether to release billions of dollars in state bonds for the project.

Mark DeSaulnier, chairman of the California State Senate Transportation and Housing Committee, said the report is "not good news" for the high-speed rail plan.

"I definitely think the state needs a very robust but realistic rail plan, and high-speed rail will hopefully be part of it, but the way we're going now it looks like it's not going to happen," the Democrat said in an interview, adding that if the decision to appropriate funds for the current plan "came in front of us right at this moment, I would most likely vote against it."

The proposed plan, which has attracted the support of Gov. Jerry Brown, called for breaking ground this year by spending $6 billion in federal and state funds to lay track for high-speed trains in the rural Central Valley, as an initial step in a broader project for a bullet train linking San Francisco to Southern California.

A spokesman for Mr. Brown, Gil Duran, reiterated the governor's support for the rail plan, saying the report "does not appear to add any arguments that are new or compelling enough to suggest a change in course."

Under the plan, the Central Valley track could be incorporated into existing Amtrak service until more funding becomes available to extend the high-speed rail line.

The federal government has already provided $3.3 billion of the $6 billion required for the Central Valley construction. For the remaining $2.7 billion, the California High-Speed Rail Authority has asked the state legislature to appropriate bond funds early this year.

The legislature's decision could have far-reaching consequences, not only for the state funds but also for the federal funds already earmarked for the project. The federal government requires that its portion be used by September 2017 or else forfeited, and the rail authority estimates that work must begin in fall 2012 for the funds to be used in time.

The rail authority sharply criticized the independent panel's report. The group failed to consider the risks of not proceeding with the rail plan, such as "lost opportunities for funding" and "the even greater costs of meeting the state's mobility needs in the absence of high-speed rail," Thomas J. Umberg, chairman of the rail authority, wrote in a rebuttal sent to legislators.

California's bullet-train effort got its start in 2008, when 53% of voters approved a bond measure that authorized the state to sell nearly $10 billion in general-obligation bonds to finance high-speed rail, which would be made available when appropriated by the legislature.

Since then, public opinion has cooled, partly because of a rising price tag for the overall project and questions about the plan's viability.

The Field Poll, a research group primarily active in California, found in a December survey that 59% of Californians would reject the bond package if the vote were held again.

The proposed California system—with trains racing from San Francisco to Los Angeles in two-and-a-half hours, compared with driving time of about six hours with no traffic—has taken center stage in the debate over bringing high-speed rail to the U.S. Proponents argue that high-speed rail would bolster the nation's aging transportation infrastructure and would be better for the environment than relying on cars.

President Barack Obama has sought to use the California effort as a showcase, in hopes of gaining support for similar projects around the country.

But another high-profile rail plan in Florida fizzled out last year after Republican Gov. Rick Scott rejected federal funds in a much-publicized move. And Republicans in Congress have pushed back against more funds for high-speed rail as part of a broader resistance to increased government spending. That has raised questions about whether enough funding will materialize for bullet trains in California, which had earlier planned to rely largely on federal funds, and elsewhere.

California Governor Jerry Brown has a big dream about a very expensive train—$98.5 billion to be precise, running from San Francisco to Los Angeles. Neither the ballooning cost of building it, nor growing public opposition, nor a string of negative expert assessments have cooled the Governor's ardor. So that leaves the California legislature to derail this boondoggle.

The case for the bullet train was iffy from the start and is now beyond salvation. A withering report this week from a state-appointed panel ought to drive the last nail in. The California High-Speed Rail Peer Review Group, asked to judge the project, declared it "not financially feasible." It said the rail route's first leg, in the Central Valley between Merced and Bakersfield, would be especially noneconomic. And it asked the legislature not to approve Governor Brown's plans to issue the first $2.7 billion batch of bonds this month to start construction on the 520-mile network.

The panel blew up just about every assumption offered about California's answer to the French TGV. The current cost estimate, already triple what was sold to voters in 2008, will likely come in even higher. Federal, much less private, financing won't be forthcoming. Projections for passenger traffic and revenues are unrealistic. The state auditor, the inspector general, California's watchdog Legislative Analyst's Office, the U.S. House Transportation Committee, among others, arrived at similar conclusions.

Four years ago, when they approved a $9 billion bond issue, California's voters backed the project based on false advertising. If the referendum were held today, according to a Field poll last month, they'd vote it down by a two-to-one margin. Two-thirds of Californians want another say. The Golden State seems to flirt with bankruptcy every year, and voters appear to understand better than their politicians that a huge infrastructure project of dubious value may not be a good idea.

Governor Brown won't hear of such fiscal realities. His spokesman said the peer review study "does not appear to add any arguments that are new or compelling enough to suggest a change in course."

Let's not forget that his supporters in the unions, who picked up the tab for the 2008 bond campaign, love this Solyndra on rails. So does the Obama Administration, which wants to make an high-speed rail example out of California. The Golden State would merely burnish an unfortunate reputation for fiscal lunacy unless legislators, who are at last starting to raise doubts, get off this ride.

When taking the economic pulse of California, one of Groucho Marx's best lines comes to mind: Either this state is dead or my watch has stopped. Any sign of life is welcome news in the once Golden State, and a bit arrived last week in the form of a state Supreme Court decision, which sounded a rare note of economic sanity in this overtaxed, overregulated state.

The court said the legislature was entitled to pull the plug on some 400 local redevelopment agencies, which long have used state money to subsidize all manner of building schemes. The decision is being hailed as a big win for Democratic Governor Jerry Brown, who wanted the development agencies defunded. The decision frees some $1.7 billion to fill big holes in California's budget this year. Mr. Brown says this money can be better used on schools and basic local services, which includes the courts.

The bigger story here is what this tussle says about how California struggles to keep its public and private economies afloat under so many burdens.

As Governor Brown points out, the localities relied on property taxes generated from these development projects to pay off the bonds behind the projects, in turn diverting tax revenue away from basic services, whose costs end up in the state budget.

True enough, but consider the challenge from the point of view of local officials. In the absence of the kind of viable development that naturally emerges from a dynamic private economy, officials turn to schemes like this to force-feed new real estate into their communities.

California, the bluest of blue Democratic states, often justifies its costly and convoluted public policies as an acceptable price to help its poorer citizens. But the irony is how hard these development-agency subsidies often are on poor and working-class people.

Typically, the agencies designate neighborhoods as "blighted" in advance of eminent-domain property takings on behalf of projects to build condominiums, shopping centers, sports stadiums, convention centers and the like. Too often, the original residents are small businesses or residents without the resources to defend against these takeovers.

One court decision won't cure the tax-and-spending ills that beset California. It should, however, open more eyes in the state to the reality that Rube Goldberg economic schemes don't work.

By VAUHINI VARA California Gov. Jerry Brown proposed Thursday to close the state's projected $9.2 billion budget gap in the next fiscal year with cuts to social services and with expected revenue from a temporary tax increase he hopes to pass in November.

Every January, California forecasts its deficit for the coming fiscal year, which starts in July. This year's deficit figure is the narrowest the state has predicted since a forecast for the 2008 fiscal year, before the recession battered the construction industry and sent the state's tax revenue slumping.

The proposal—which typically serves as a template as legislators wrangle over the budget for the following fiscal year—calls for $4.2 billion in cuts to programs such as welfare and in-home supportive services, along with tax measures and other changes that would boost revenue by $4.7 billion.

Mr. Brown, speaking at a news conference in Sacramento, called his plan "an honest budget" that "will eliminate the budget deficit, finally, after years of kicking the can down the road."

Among Mr. Brown's proposed cuts are a $946 million reduction for CalWORKs, the state's welfare program, and an $842 million cut to California's Medicaid program known as Medi-Cal.

The bulk of the extra revenue of $4.7 billion in Mr. Brown's proposal, $4.4 billion, would come mainly from temporarily increasing the personal income tax on people making $250,000 or more by up to two percentage points, and by raising the sales tax by half a percentage point—a measure that Mr. Brown is asking voters to pass in November. If the measure fails, Mr. Brown has earmarked other cuts to make up for the lost revenue, including in education.

.Republicans criticized the governor's proposal. Tom Del Beccaro, chairman of the state Republican Party, said the plan "lacks innovation as well as any meaningful structural reforms."

Mr. Brown's Democratic allies took a more cooperative tone. "The governor's budget plan reflects the fact that even though California's economic recovery is gaining strength, we still face a year of difficult choices," said Assembly Speaker John Pérez. "His plan underscores the need for new revenues to avoid cuts that will be a major drag on the recovery."

The budget situation in the most populous state mirrors the national picture, said Todd Haggerty, an analyst at the National Conference of State Legislatures, a clearinghouse for state lawmakers. Like other states, California anticipates a narrower budget gap than it has seen in years—and yet, the slow economic recovery and continuing concerns about the future mean budget woes persist.

Any legislative wrangling over Mr. Brown's budget is likely to be less severe than in past years. That is because, for many years, passing a budget in California required the support of two-thirds of the state legislature. But in 2010, voters passed a ballot measure that now allows budgets to be passed with the support of a simple majority.

Last year, Mr. Brown sought Republican help because he wanted to extend an earlier tax increase—and tax measures still require the approval of a two-thirds majority.

But this year's tax measure won't require legislative approval, which means Democrats, who control the statehouse, can pass this year's budget without Republican input.

Mark Baldassare, president of the nonpartisan Public Policy Institute of California, a think tank, called Mr. Brown's tack of relying partly on voters' passage of his tax measure "unusual."

Typically, governors work with legislators to come up with budget plans, but Mr. Brown has said he doesn't want to negotiate with Republican lawmakers on taxes this year, after his failure last year to gain GOP support to extend some expiring tax hikes.

Given that the budget calls for cuts to education, among other areas, if the tax measure fails, Mr. Brown's approach "tests voters' willingness to pay for services they want," Mr. Baldassare said.

Eventually California will be asking for Federal aid like Greece telling Germany to bail them out:

***Greek fury at plan for EU budget controlBy Peter Spiegel in Brussels and Kerin Hope in AthensGreece’s finance minister angrily rejected a German plan for the eurozone to impose a budget overseer onto Athens in return for a new €130bn bail-out, saying it would improperly force his country to choose between “financial assistance” and “national dignity”.

Evangelos Venizelos said the proposal to create a European Union “budget commissioner” with the power to veto Greek tax and spending decisions, revealed by the FT, “ignores some key historical lessons”. He added EU lenders already had sufficient monitoring safeguards in place in its bail-out programme.

Mr Venizelos’s comments came as talks in Athens shifted from the weeks-long negotiations over restructuring its privately held debt to the question of which public institutions will have to pay to fill a widening gap in Greece’s budget figures.

According to officials involved in the discussions, negotiators representing Greek bondholders largely completed a deal with Athens at the weekend which would cut the long-term value of privately held bonds by just over 70 per cent.

But the formal signing of the agreement has been delayed amid disagreement over whether a remaining budget shortfall will be filled by further Greek austerity measures, additional loans from EU governments, or by the European Central Bank, which is facing pressure to give up profits on the €40bn in Greek bonds it holds.

A deal is essential to finalising the new Greek bail-out, which must be completed before a €14.4bn bond comes due on March 20 or Greece would become the first developed economy to default in nearly 60 years.

“If the process is not completed successfully, we will be faced with the spectre of bankruptcy that would have grave consequences for society, and especially for the poor,” Lucas Papademos, the Greek prime minister, said after meeting Greek political leaders on Sunday.

EU and International Monetary Fund officials have already presented the Greek government with a 10-page list of “prior actions” Athens must take before being granted the new bail-out. The list, obtained by the Financial Times, includes cutting 150,000 public sector jobs within three years and cutting this year’s budget deficit by a further 1 per cent of economic output.

To get Greece’s debt down to 120 per cent of economic output by 2020, the IMF has insisted more must be done. A senior EU official said that talks which focused on whether European lenders or the ECB would shoulder that burden were now expected to stretch into mid-February.

Eurozone leaders, led by Germany’s Angela Merkel, want Monday’s summit in Brussels to focus on agreeing a new treaty to enshrine fiscal discipline across the bloc. Finance ministry officials will resume talks on Greece later this week.

The German plan, which was circulated on Friday and would also force Greece to pay its debt obligations before spending any money on normal government expenditures, caught Mr Papademos and other eurozone governments by surprise. Officials said it was unlikely to be adopted.

“The Germans have a lot of influence but that goes a little beyond the limits the outer member states could support,” said a senior official involved in the discussions. “If you went with that model you’d do away with the normal democratic decision-making in a member state.”***

I live in California . If you were wondering what living in Obama’s second term would be like, wonder no longer. We in California are living there now.

California is a one-party state dominated by a virulent Democrat Left Enabled by a complicit media where every agency of local, county, and state government is run by and for the public employee unions. The unemployment rate is 12%.

California has more folks on food stamps than any other state, has added so many benefits and higher rates to Medicaid that we call it "Medi-Cal." Our K-12 schools have more administrators than teachers, with smaller classes but lower test scores and higher dropout rates with twice the per-student budget of 15 years ago. Good job, Brownie.

This week, the once and current Gov. Jerry "Moonbeam" Brown had to confess that the "balanced" state budget adopted five months ago was billions in the red because actual tax revenues were billions lower than the airy-fairy revenue estimates on which the balance wasPredicated.

After trimming legislators' perks and reducing the number of cell phones provided to state civil servants, the governor intoned that Drastic budget reductions had already hollowed out state programs for the needy, law enforcement and our schoolchildren. California government needed more money.

Echoing the Occupy movement, the governor proclaimed the rich must pay their fair share. Fair share? The top 1% of California income earners currently pays 50% of the state's income tax.

California has seven income tax brackets. The top income tax rate is 9.3%, which is slapped on the greedy rich earning at least $47,056 a year. Income of more than $1 million pays the "millionaires' and billionaires'" surcharge tax rate of 10.3%.

Brown's proposal would add 2% for income over $250,000. A million- dollar income would then be taxed at 12.3%. And that's just for the state.

Brown also proposed a one-half-cent sales tax increase, which would bring sales taxes (which vary by county) up to 7.75% to as much as10%. Both tax increases would be on the ballot in 2012.

The sales tax increase proposal immediately brought howls of protest from the Left (of Brown!). Charlie Eaton, a sociology grad student at UC Berkeley and leader of the UC Student-Workers Union, said, "We've paid enough. It's time for millionaires to pay."

At least five other ballot measures to raise taxes are circulating for signatures to get on the 2012 ballot in California . The governor's proposals are the most conservative.

The Obama way doesn't end with taxes.

The governor and the state legislature continue to applaud the efforts of the California High Speed Rail Authority to build a train connecting Los Angeles and San Francisco . Even though the budget is three times the voter-approved amount, and the first segment will only connect two small towns in the agricultural Central Valley. But hey, if we build it, they will ride.

And we don't want to turn down the Obama bullet-train bucks Florida and other states rejected because the operating costs would bankrupt them. Can't happen here because we're already insolvent.

If we get into real trouble with the train, we'll just bring in the Chinese. It worked with the Bay Bridge reconstruction. After the 1989 earthquake, the bridge connecting Oakland and San Francisco was rebuilt with steel made in China . Workers from China too. Paid for with money borrowed from China. Makes perfect sense.

In California, we hate the evil, greedy rich (except the rich in Hollywood, in sports, and in drug dealing). But we love people who have broken into California to eat the bounty created by the productive rich.

Illegals get benefits from various generous welfare programs, free medical care, free schools for their kids, including meals, and of course, instate tuition rates and scholarships too. Nothing's too good for our guests.

To erase even a hint of criticism of illegal immigration, the California Legislature is considering a unilateral state amnesty. Democrat State Assemblyman Felipe Fuentes has proposed an initiative that would bar deportation of illegals from California.

Interesting dilemma for Obama there. If immigration is exclusively a federal matter, and Obama has sued four states for trying to enforce Federal immigration laws he won't enforce, what will the President do to a California law that exempts California from federal immigration law?

California is also near fulfilling the environmentalist dream of de-industrialization.

After driving out the old industrial base (auto and airplane assembly, for example), air and water regulators and tax policies are now Driving out the high-tech, biotech and even Internet-based companies that were supposed to be California 's future.

The California cap-and-trade tax on business in the name of reducing CO2 makes our state the leader in wacky environmentalism and guarantees a further job exodus from the state.

Even green energy companies can't do business in California. Solyndra went under, taking its taxpayer loan guarantee with it.

No job is too small to escape the regulators. The state has even banned weekend amateur gold miners from the historic gold mining streams in the Sierra Nevada Mountains .

In fact, more and more of California’s public land is off-limits to recreation by the people who paid for that land. Unless you're illegal.

Then you can clear the land, set up marijuana plantations at will, bring in fertilizers that legal farmers can no longer use, exploit illegal farm workers who live in hovels with no running water or sanitation, and protect your investment with armed illegals carrying guns no California citizen is allowed to own.

The rest of us only found out about these plantations when the workers’ open campfire started one of those devastating fires that have killed hundreds of people and burned out thousands of homes in California over the last decade.

It's often said that whatever happens in California will soon happen in your state.

You'd better hope that's wrong.

******************************************************Roger Hedgecock is the former mayor of San Diego and a nationallysyndicated radio talk show host.

Overall, I think Brown is doing a good job, given the difficult situation. Taxes are high in CA, but then so are deductions. The rich seem quite happy here.

Yes, Hedgecock lives in CA and is a nationally syndicated conservative radio host. He was even mayor of San Diego once.

Hedgecock to Resign as San Diego Mayor FridayOctober 12, 1985|BARRY M. HORSTMAN | Times Staff WriterSAN DIEGO — Mayor Roger Hedgecock, whose 2 1/2 years at City Hall were marked first by a heady popularity and later by criminal accusations, Friday announced plans to resign as a result of his conviction on 13 felony counts.

City Atty. John W. Witt has said that Hedgecock faced automatic ouster from office on Nov. 6, when he is to be sentenced by Judge William L. Todd Jr. on his conviction last Wednesday by a Superior Court jury of conspiracy and 12 perjury counts, all felonies.

States: "You can check out any time you like," the Eagles said of California, "but you can never leave." Somebody forgot to tell businesses. They keep leaving the Golden State in growing numbers.

In 2011, more businesses (254) quit California than the year before (202), which was a high-water mark over 2009 (51). Last year, roughly five businesses left in any given week, one more than left in each week of 2010 when the average was 3.9.

At one time, California was truly the land of opportunity. But the business climate has turned hostile.

According to Jon Coupal, president of the Howard Jarvis Taxpayers Association, and John Kabateck, executive director of the National Federation of Independent Businesses, the state's business tax climate is the second worst in the nation. The corporate income tax rate is 8.84%, the highest west of the Mississippi and eighth highest in the country.

California's income tax, which is the tax many small-business owners pay, is the nation's third highest; the 9.3% rate kicks in at $46,349 in annual income for those who file as individuals, and the 10.3% rate applies to income over $1 million a year.

Then there's the highest sales tax (7.25%, plus local levies in some areas) in the country, the fourth-highest capital gains tax (9.3%) and the second-highest gasoline tax (an average of 65 cents a gallon).

There's also the vicious regulatory environment that businesses have to negotiate.

"California's anti-business climate is worse than ever because many politicians are making a career out of treating businesses as an object of scorn vs. a resource to be appreciated," says Joe Vranich, an Orange County relocation expert who tracks business movement out of the state and provided the exit numbers cited above.

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"Hence, we see efforts to increase taxes, regulations, fines and fees on businesses."

The benefit of leaving California is immense. Vranich says businesses save 20% to 40% a year in costs after their out-of-state moves are completed.

One company executive who left told Vranich that "we compete globally and we can't compete with California's costs." Another told him that California "is the worst state in the country to do business in. . .. There doesn't seem be any improvement on the horizon."

Shortly before heading back to New Jersey this past Thursday for a few days, I started rounding up the latest reports of California’s myriad woes. Ready to survey the train wreck? First up, in the Wall Street Journal, Michael J. Boskin and John F. Cogan flip Thomas Friedman’s memorable headline in the New York Times last year on its head. “Can Greeks Become Germans?,” Friedman queried. Boskin and Cogan write that California has become America’s Greece:

The state’s progressive tax-and-spend experiment is broken, threatening basic services, from courts and parks to education and health care for its most vulnerable citizens. Mr. Brown’s tax initiative only exposes the state to an ever more dangerous roller-coaster ride.

No wonder many Silicon Valley CEOs say they won’t expand in California because of high taxes and burdensome regulation. And no wonder net migration has recently reversed, with hundreds of thousands of workers and their families leaving the state in search of better opportunities.

California still ranks first in technology, agriculture and entertainment among the 50 states. But it is near the bottom in business and tax climate and state bond ratings. It’s a complex picture, but at its core is the high-tax welfare state run amok.

Many Americans fear the federal fiscal train wreck will turn us into Greece. But, barring major change, they need look no further than California to see what this future portends. Relying on ever-higher taxes to fund payments to an outsized population of benefit recipients is a recipe for exporting prosperity. That is one California trend that other states emulate at their peril.

Part of California’s woes is that this once more-or-less Red State has devolved into a self-contained world of Blue and Bluer. So much so that, as Victor Davis Hanson asks at NRO, “In California, Whom Will They Blame?”

Here in California, students just marched on Sacramento in outrage that state-subsidized tuition at the UC and CSU campuses keeps climbing. It is true that per-unit tuition costs are rising, despite even greater exploitation of poorly paid part-time teachers and graduate-student TAs. But the protests are sort of surreal. The California legislature is overwhelmingly Democratic. The governor is a Democrat. The faculties and administrative classes are largely Democratic. Who then, in the students’ minds, have established these supposedly unfair budget priorities?

Sales, income, and gas taxes are still among the highest in the nation (and are proposed to rise even higher) — prompting one of the largest out-of-state exoduses of upper-income brackets in the nation. The state budget is pretty much entirely committed to K–12 education (whose state-by-state comparative test scores in math and science hover between 45th and 49th in the nation), prisons, social services, and public-employee salaries and pensions. Whom, then, can the students be angry at?

Are students angry at public-union salaries and pensions that are among the highest in the nation? Do they think the many highly compensated retired Highway patrol officers have shorted students at UC Davis? Are they mad at the 50,000 illegal aliens in the California prison system that might have siphoned off scholarship funds from CSU Monterey Bay? Or is the rub the influx of hundreds of thousands of children of illegal aliens who require all sorts of language remediation and extra instruction in the public schools, and so might in theory divert library funds from UC Santa Cruz?

Perhaps the students don’t want billions to be committed to high-speed rail that might rob Berkeley of needed funding, or environmental efforts to introduce salmon into the San Joaquin River, in which the $70 million spent so far in studies and surveys might have come from nearby CSU Fresno? Are they mad at state social services, whose medical expenses have skyrocketed to address the health-care needs of millions of illegal aliens, and thus in theory could curb the choice of classes at CSU Stanislaus? Are they angry that some $10–15 billion a year probably leaves the state as remittances to Mexico?

If one cannot blame the wealthy for “not paying their fair share” (the top 1 percent of Californians now pay about 37 percent of all income-tax revenue — and their numbers have decreased by one-third in recent years, as the state has come to rely on the income tax for half its revenue), or Republican majorities in government, who, then, is left to blame?

But then, that’s been the problem with the Occumutants from the start, and not just in California: they loathe Wall Street — which supported Obama in 2008 and formed his fiscal brain trust. They loathe their student loans — and yet the university system is as blue as it gets. And they themselves can’t or won’t protest President Obama, making themselves the first protest fighting for the establishment status quo.

State Controller John Chaing continues to uphold the California Great Seal Motto of “Eureka”, i.e., 'I have found it'. But what Chaing is finding as Controller is that California’s economy as measured by tax revenues is still tanking. Compared to last year, State tax collections for February shriveled by $1.2 billion or 22%. The deterioration is more than double the shocking $535 million reported decline for last month. The cumulative fiscal year decline is $6.1 billion or down 11% versus this period in 2011.

While California Governor Brown promises strong economic growth is just around the corner, Chaing proves that the best way for Sacramento politicians to hurt the economy and thereby generate lower tax revenue, is to have the highest tax rates in the nation.

California politicians seem delusional in their continued delusion that high taxes have not savaged the State’s economy. Each month’s disappointment is written off as due to some one-time event.

The State Controller’s office did acknowledge that higher than normal tax refunds for February might have reduced the collection of some personal income taxes. Given that 2012 has an extra day in February for leap year, there might have been one day more of tax refunds sent out. But the Controller’s report shows personal income tax collections fell by $325 million, or 16% versus last year. Furthermore, leap year would have added another day for retail sales and use tax collection, but those revenues also fell during February-by an even larger $813 million, 25% decline from 2011.

The more likely reason tax collections continue falling is that businesses and successful people are leaving California for the better tax rates available in more pro-business states.

GM, It is interesting that they have the highest marginal rates in the nation and yet revenues are tanking, but stay tuned. Rapid economic growth is right around the corner... lol.

We heard the opposing view expressed that tax rates and over-regulation at the margin do not have a noticeable on economic activity or growth. (I asked for data to back up that view - it should be coming shortly.

The rich simply use the higher rate to calculate their new tax bill and have no interest, motive or option of altering their behavior, to either invest less or invest elsewhere. That view unfortunately requires a complete denial of the definition of what it means to be rich.

One of the economists used to track the one-way, UHaul, medium sized truck price movement index to estimate the speed of assets leaving California.

The economic loss of once-great Calif to the rest of this nation is not like Europe losing Greece.

"We heard the opposing view expressed that tax rates and over-regulation at the margin do not have a noticeable on economic activity or growth. (I asked for data to back up that view - it should be coming shortly."

JDN should have it any day now....

Pay no attention to the economy crumbling around us, we just need to raise taxes a bit more and it'll all be unicorns and rainbows, and great government healthcare for everyone!

It's hard to believe now, but Jerry Brown once ran for President as a reformer who favored a flat tax with a 13% top federal rate. That was 1992. Nowadays in his second stint as Governor, he's running to give California alone a higher top income-tax rate.

The incredible shifting Governor recently agreed to adjust his November ballot initiative to include an even higher top tax rate. Previously he favored an increase to 12.3% from 10.3% today. But the government-unions that live off tax revenues had threatened to sponsor their own ballot measure raising the top rate even higher.

The Governor feared that divided support might doom both. So he and the unions agreed to back only one initiative with a top rate of 13.3%. The measure would also raise the state sales tax by a quarter of a percentage point to 7.5%, or more than 9% including the sales tax in some cities. Oh, and instead of lasting five years, the income-tax increase would last for seven.

All of this is said to be necessary to balance a $9.2 billion budget deficit. So what else is new? Mr. Brown expects about $9 billion in added revenue, up from $7 billion in his first package. But the state Legislative Analyst's Office has already told Mr. Brown that he's hallucinating to think he can get that much money from a corner of the taxpayer base.

The top 1% in California pay between one third and half of all state income tax revenues, depending on the condition of the economy. California already has the fourth highest income tax in the nation, behind Hawaii and Oregon at 11% and New York City at nearly 13%. The national average for the top income tax rate is under 6%. Nine states have no income tax.

So for the privilege of living in California, a millionaire would pay close to $125,000 a year more in income tax than someone in Nevada, Texas or Florida. A Californian earning $10 million would pay an extra $1 million or more than if she moved to a state without an income tax, or nearly $500,000 than an average tax state.

Even Mr. Brown, in one of his saner moments earlier this year, said that relying on millionaires to pay the bills causes "more volatility" in revenue collections, which has meant "a more or less constant state" of deficits. He was right. Capital gains collections collapsed to $734 million in 2009-10 from $1.6 billion in the boom years. So why would Mr. Brown make that problem worse?

One of the last states to have a tax rate as high as California is proposing was Delaware in the 1970s. Its rate hit 19.8%. Then-Governor Pete du Pont cut the rate to 10.3% in 1979 and later to 5.95%, and after five years the state's revenues had nearly doubled and its credit rating went from the worst to one of the best.

None of these facts matter to Mr. Brown or his allies because the tax increase is simply about the political power to deliver money to the interests that live off government. Mr. Brown's budget raises spending in 2013 by 7% and by roughly 5% on average over the next four years. Every dollar of higher taxes is accompanied by roughly a dollar increase in spending. If the revenues don't materialize as promised from this tax increase, they'll raise taxes again—and again, and . . . .

California voters will have to decide whether to ratify this welfare-state redistribution one more time, or finally force the state to confront the limits of tax and spend politics.

California’s slow-motion tragedy could end up as a national one, warns Joel Kotkin.

Barack Obama learned the rough sport of politics in Chicago, but his domestic policies have been shaped by California’s progressive creed. As the Golden State crumbles, its troubles point to those America may confront in a second Obama term.

From his first days in office, the president has held up California as a model state. In 2009, he praised its green-tinged energy policies as a blueprint for the nation. He staffed his administration with Californians like Energy Secretary Steve Chu—an open advocate of high energy prices who’s lavished government funding on “green” dodos like solar-panel maker Solyndra, and luxury electric carmaker Fisker—and Commerce Secretary John Bryson, who thrived as CEO of a regulated utility which raised energy costs for millions of consumers, sometimes to finance “green” ideals.

Obama regularly asserts that green jobs will play a crucial role in the future of the American economy, but California, a trend-setter in the field, has yet to reap such benefits. Green jobs, broadly defined, make up only about 2 percent of jobs in the state—about the same proportion as in Texas. In Silicon Valley, the number of green jobs actually declined between 2003 and 2010. Meanwhile, California’s unemployment rate of 10.9 percent is the nation’s third highest, behind only Nevada and Rhode Island.

When Governor Jerry Brown predicted a half-million green jobs by the end of the decade, even The New York Times deemed it “a pipe dream.”

President Barack Obama speaks at the University of Iowa Field House, Wednesday, April 25, 2012, in Iowa City, Iowa. , Charlie Neibergall / AP Photo

Obama’s push to nationalize many of California’s economy-stifling green policies has been slowed down, first by the Republican resurgence in 2010 and then by his reelection considerations. But California’s politicians, living in what’s become essentially a one-party state, have doubled down on green orthodoxy. As the president at least tries to cover his flank by claiming to support an “all-in” energy policy, California has simply refused to exploit much of its massive oil and gas resources.

Does this matter? Well, Texas has created 200,000 oil and gas jobs over the past decade; California has barely added 20,000. The state’s remaining energy producers have been slowing down as the regulatory environment becomes ever more hostile even as producers elsewhere, including in rustbelt states like Ohio and Pennsylvania, ramp up. The oil and gas jobs the Golden State political class shuns pay around $100,000 a year on average.

“When Governor Jerry Brown predicted a half-million green jobs by the end of the decade, even The New York Times deemed it “a pipe dream.””

Instead, California has forged ahead with ever-more extreme renewable energy mandates that have resulted in energy costs roughly 50 percent above the national average and expected to rise substantially from there. This tends to drive out manufacturing and other largely blue-collar energy users.

Over the past decade the Golden State has grown its middle-skilled jobs (those that require two years or more of post-secondary education) by a mere 2 percent compared to a 5.3 percent increase nationwide, and almost 15 percent in Texas. Even in the science-technology-engineering and mathematics field, where California has long been a national leader, the state has lost its edge, growing just 1.7 percent over the past 10 years compared to 5.4 percent nationally and 14 percent in Texas.

A recent Public Policy of California study shows that since the recession, the gap between rich and poor has widened more in California than in the rest of the nation. Lower-income workers have seen their wages drop more precipitously than those of the affluent. And the middle class is proportionately smaller and has shrunk more than elsewhere. Adjusted for cost of living, it stands at 47.9 percent in California compared to nearly 55 percent for the rest of the country.

Meantime, many Californians have been departing for more affordable states, with a net loss of four million residents to other states over the past 20 years (while continuing, of course, to attract immigrants.) Of those who remain, nearly two-in-five Californians pay no income tax, and one in four receive Medicaid.

There are some people are prospering in California, including many of the affluent supporters who Obama courts on his frequent fundraising forays here. Tenure-protected academics from the University of California constitute his third-largest donor base, while Google ranks fifth and Stanford twelfth, according to Open Secrets.

Silicon Valley may emerge as the biggest source of campaign cash for Obama and the Democrats in the years ahead. After losing 18 percent of its jobs earlier in the decade, the Valley has resurged, along with Wall Street, aided by the cheap-money-for-the-rich policies of Federal Reserve Chairman Ben Bernanke. But while California’s high-tech job growth, largely in software, has been significant, the rate of increase has been less than half that of key competitors such as Utah, Washington, and Michigan.

The IPO-lottery, Hollywood, and inherited-wealth crowds can afford the state’s sky-high costs, especially along the coast, but most California businesses can’t. Under Brown and his even less well-informed predecessor, Arnold Schwarzenegger, the official mantra has been that the state’s “creative” entrepreneurs would trigger a state revival. This is very much the hope of the administration, which trots out companies like Facebook, Apple, and Google as exemplars of the American future. “No part of America better represents America than here,” the president told a crowd at the Computer History Museum in Mountain View last fall.

Yet Silicon Valley represents just a relatively small part of the state’s economic base. Although the Valley—particularly the Cupertino to San Francisco strip—has recovered from the 2008 market meltdown, unemployment in the blue-collar city of San Jose hovers around 10 percent. The Oakland area, just across the Bay, ranked 63rd out of 65 major metropolitan in terms of employment trends, trailing even Detroit according to a recent analysis done by Pepperdine University economist Michael Shires. Other major California metros, including Los Angeles, Orange County, Riverside-San Bernardino, and Sacramento all ranked near the bottom.

The newer companies that can afford the sky-high costs of coastal California, and can pay their employees adequately to do the same—places like Google, Apple, Facebook, and Twitter—employ relatively few people compared to older, manufacturing-oriented technology firms such as Hewlett-Packard and Intel. While cherry picking highly educated professionals, the new firms create few local support positions that would spread some of the wealth. What middle-income jobs they do create tend to be located in lower-cost, more business-friendly American cities like Salt Lake City or Austin, or, increasingly, overseas.

Elite institutions like Stanford still thrive, but the state’s once-great educational system is creaking under reduced funding, massive bureaucracy, and skyrocketing pensions. Once among the best-educated Americans, Californians are rapidly becoming less so. Among people over 64, California stands second in percentage of people with an associate degree or higher; among those aged 25 to 34, it ranks 30th.

For devoted Californians, accustomed to seeing their state as a national and global exemplar, these trends are deeply disturbing. Yet the key power groups in the state—greens, public employees, and rent-seeking developers—seem intent on imposing ever more draconian regulations on energy and land use, seeking for example, to ban construction of the single-family houses preferred by the vast majority of Californians.

The increasingly delusional nature of the state’s politics is best captured by the urgent political push to build a fantastically expensive—potentially costing as much as $100 billion—high-speed rail line that would eventually connect the Bay Area, Los Angeles and the largely rural places in between. Obama has aggressively promoted high-speed rail nationally, but has been pushed back by mounting Republican opposition. Yet in one-party California, Jerry Brown mindlessly pushes the project despite the state’s huge structural deficits, soaring pension obligations, and decaying general infrastructure. He’s continued doing so even as the plan loses support among the beleaguered California electorate.

It’s hard to see how these policies, coupled with a massive income tax increase on the so-called rich (families, as well as many small businesses, making over $250,000), can do anything other than widen the state’s already gaping class divide. Yet given the power of Californian ideas over Obama, one can expect more such policies from him in an electorally unencumbered second term. California’s slow-motion tragedy could end up as a national one.

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Joel Kotkin is a Presidential Fellow in Urban Futures at Chapman University and a contributing editor to the City Journal.

The weekend produced a spate of dang-this-is-bad articles on the economic situation in California. Steven Greenhut’s for the Orange County Register is entitled “California to middle class: drop dead.” At The Daily Beast, Joel Kotkin laments that “As California Collapses, Obama Follows its Lead.” (H/t – and a “Read it, people!” shout-out – to Ed Driscoll at PJM.)

But what does all this look like in terms of numbers? What’s the how much and where and whom of the Golden State collapse? Perhaps the most interesting and telling thing is that it really is as bad as it looks. And the reasons are pretty much what you’d expect. Here’s the California story, in numbers.

According to a March 2012 report, 855,000 is how many private-sector jobs California has lost since the recession started four years ago. (H/t: California Political News & Views.) The state today enjoys an unemployment rate of 11%, compared with the official national average of 8.3%

Texas, by contrast, has added 139,800 jobs, posting the biggest absolute gain among the 50 states. (California’s is the biggest absolute loss.) Texas’ unemployment rate is 7.1%. Number 3 on the job-growth list? The District of Columbia, with 21,000 added private-sector jobs. Government is big business.

But we were talking about California. How does California rank in terms of the average state and local tax burden? According to the Tax Foundation, in 2009, California had the 6th heaviest tax burden in the nation, at 10.6%. (New Jersey was #1, followed by New York at #2.) That’s the in-state tax burden, of course. Federal taxes are on top of that.

Of course, business climate comprises more than the average individual tax burden. The Tax Foundation looks at five forms of taxation – corporate tax, individual income tax, sales tax, property tax, and unemployment insurance tax – to index the business climates of the 50 states. By this combined measure, the Tax Foundation ranks California 48th in business climate. (New York is 49th, and New Jersey 50th.)

State regulatory environment? George Mason University’s Mercatus Center ranks the Golden State 48th in the nation. New Jersey and New York are numbers 49 and 50, respectively.

How about other business costs? California had the 5th highest state premium ranking for worker compensation insurance costs in 2010 (although the state’s position improved slightly in 2011 due to other states raising their state premiums).

California ranks 7th highest in electric utility costs, with Hawaii being the highest, followed by Connecticut and Alaska.

According to the Small Business & Entrepreneurship Council, California has the third-highest per-gallon gasoline tax (Connecticut and New York are #1 and #2) and by far the highest tax on diesel, at 52.5 cents per gallon. (Some numbers below also come from the SB&EC report.)

California perennially has the second-highest gasoline prices at the pump (Hawaii is #1), although the state has regularly been ranked 3rd or 4th in oil production in recent years. (In the past week the statewide average was $4.15 for a gallon of regular, down from $4.36 a month ago.) In spite of having the third largest oil and gas reserves of any state in the nation, California is ranked dead last among all US jurisdictions for global oil investment. The fact that California hasn’t issued a new offshore drilling permit for over 30 years is undoubtedly a factor, as is the fact that the Monterey Shale Oil Field, which holds 64% of all the recoverable shale oil in the United States, is hamstrung by lawsuits, a typical condition in the state for both drilling and refining operations.

In spite of the state’s natural bounty, California produces only 37% of its statewide oil consumption. The rest comes from other states and countries, at added expense.

In terms of the employer burden of health-insurance mandates, California is 9th among the 50 states and the District of Columbia. (Rhode Island, Maryland, and Minnesota have the highest burdens.)

Meanwhile, California ranks 4th highest in state and local government spending per capita. The District of Columbia is the highest, followed by Alaska, Wyoming, and New York.

Ah, yes, state spending. California has by far the largest debt of any US state, at around $612 billion with state and local debt and pension liabilities included. In terms of raw numbers, New York posts a pathetic second place with only $305 billion. The size of California’s population allows the Golden State to slip to only 7th place in terms of per capita state and local debt. The District of Columbia walks off with another prize in this category, having on the books 85% more debt per capita than the 50-state average.

The California debt spiral is due in part to the steep decline in state tax revenues. The 22% year-on-year decline observed in February 2012 doesn’t tell the whole story either; California had already posted dramatic revenue losses in business and property taxes between 2007 and 2010. Business-tax revenues dropped 18% in that period, and property-tax revenues fell 30% due to the real estate market crash.

Let’s talk population trends. Many readers are familiar with the arresting Golden State statistics cited by a Wall Street Journal article in March:

From the mid-1980s to 2005, California’s population grew by 10 million, while Medicaid recipients soared by seven million; tax filers paying income taxes rose by just 150,000; and the prison population swelled by 115,000.

The net gain in tax filers includes the author: I was added as a tax-paying filer to the California income tax rolls in 2004. Apparently there are another 149,999 of us, and I’m thinking we need a T-shirt. (And yes, alert readers, I understand that this was a net gain, reflecting both additions to and subtractions from the tax rolls over time. Just having some fun with these sad little numbers.)

California also has the distinction of having 12% of the US population and 33% of the nation’s welfare recipients. Governor Jerry’s Brown’s 2012-13 budget proposal includes $100 billion for health and human services, which, on an annualized basis, is more than all the state and local spending in 27 of the 50 states.

In California, meanwhile, the tax code is steeply progressive. Prior to the recession, the state got 45% of its income tax revenues from the top 1% of filers. As the Wall Street Journal pointed out last year, the incomes of filers in that top 1% — which in California starts at $490,000 – are more volatile than the incomes of other filers. California, New York, Connecticut, and Illinois are some of the states most dependent for revenue on the top 1%, and they have opened up the biggest state deficits during the recession.

How many businesses are leaving California? In 2011, 254 businesses left California, or an average of 5 per week. 202 left in 2010, 51 in 2009. Even “green” businesses are leaving California. The business environment is that overregulated, and costs are that high. A business saves, on average, between 20% and 40% on costs by moving out of California. (Even the lower figure is astounding for a move within the same nation.)

But according to a 2011 report, 2500 employers ceased operations in California between 2007 and 2011. The great majority of them simply went out of business. (I can certainly vouch for the observability of that trend in my area of Southern California. Besides small businesses closing – I can’t seem to keep a dry cleaner for longer than 6 months – we’ve had a number of big chain businesses pull out, leaving gigantic empty stores and parking lots. The last time I stocked up on household supplies at the local Wal-Mart, there were no greeters at the doors. An ominous portent.) How did California’s real GDP growth rank in 2011? 34th in the United States.

As of January 2012, which state had the highest average mortgage debt per household? California, with $313,000. California has had the second highest foreclosure rate of any state throughout the recession (Nevada has the highest). In terms of the state’s percentage of underwater mortgages, California ranks only 6th (Nevada, again, is #1). But that’s a little deceiving, since the value of the underwater mortgages in California is over $544 billion. That sum represents nearly 30% of total mortgage debt in California, which is $1.94 trillion – or 22% of all mortgage debt in the United States.

Well, but which state had the highest tuition hike for its state university system in 2011? That would be California, with a tuition jump of 21%. (This hike mitigated somewhat the advantage of in-state tuition for those here illegally, which California offers along with 11 other states.)

Oh, and California has far and away the most endangered animal species, with 111. No other state comes close. Hawaii has California beat on endangered plant species, however, with 273 to the Golden State’s 178.

J.E. Dyer’s articles have appeared at The Green Room, Commentary’s “contentions,” Patheos, The Weekly Standard online, and her own blog, The Optimistic Conservative.

For those stilling living in the remaining sweet spots, that may be so, but I find it hard to be sanguine about the state as a whole.

Indeed, but for the unique role of LA in martial arts my family and I would be out of here.

Yes, I agree, it is difficult to always be cheerful about this states future. We do have our problems. That said, in some ways I am glad so many are leaving. The successfulusually don't leave.

"California's population growth has slowed dramatically over the past several years, meaning the state likely won't reach 50 million residents until 2046 -- 14 years later than previously expected, according to a USC study released Tuesday.

Researchers said the slow-down in population growth should be viewed as a positive sign by policy-makers struggling to balance budgets.

"This is surely good news for local governments and taxpayers who are struggling to keep up with the costs of growth," according to study co-author Dowell Myers, professor of urban planning and democracy at the USC Price School of Public Policy. "These projections suggest there is more time to plan a much better future for California."

According to the study, the reduced growth rate is largely caused by slowing immigration rates. Researchers found that the percentage of Californians who were born out of the country is expected to remain at 27 percent through 2030. That's an abrupt change from the 1980s and 1990s, when the rate was increasing sharply, the report found."

As you run along the sand dunes watching the sunset over the ocean, ask yourself where you would be more happy.

We lead the nation in so many areas. I can't think of another place in America that I would rather live than California.

"Yes, I agree, it is difficult to always be cheerful about this states future. We do have our problems. That said, in some ways I am glad so many are leaving."

I recall reading in the Economist that if California stopped every government service they offer the debt is so large in wouldn't evn make a dent.

JDN's post is a certainly proof that socialism/liberalism/progressive or what ever label they want to call themselves to hide who they are is a disease. A cancer without end. Not you personally JDN , but your politics.

Without a doubt California is a beautiful place and JDN's pride is a positive thing. It is more than a coastline but plenty of the rest is beautiful and abundant too. Plenty of human assets with great universities and historically great businesses. As CCP suggests, the point of the criticism is that it is a very badly governed place and more than a warning to the rest of us. So bad that a moderate Republican couldn't turn the corner, nor now can a moderate Dem. Like CCP says, the spending is so large and out of control there is no faucet any more for lawmakers to even slow the spending.

Personally I don't understand how leaving future voters and taxpayers to pay legacy costs of past workers work in the form of pensions and healthcare passes any test of consent of the governed.

The migration out is huge phenomenon. JDN argues that the successful are the ones staying. I don't believe that but if true, look at what problems they are exporting to the other 49.

"I drive each week from one of the poorest areas in the U.S. to one of the wealthiest. A man from Mars after walking in west Selma and then downtown Menlo Park could tell you exactly why the gap is not three hours, but more like three centuries. One-quarter mile from my house about 30 people live in wrecked trailers behind a farmhouse with an assortment of barn animals wandering about the premises; about 100 yards from my tiny studio apartment in Palo Alto, Facebook zillionaires bid upwards of $2 million for a tiny house worth about $70,000 in Fresno.

But both these extremes at least share common laws — in theory a common language, the same constitution, and an identical popular culture. In contrast, when I go from the Peloponnese to the Rhine I see about the same vast economic divide, but one in which different histories, languages, cultures, and ethnicities acerbate — not mitigate — the gulf. In fact, if I were to dream up a way of having central, rural California go to war against the wealthier coastal strip from San Diego to San Francisco, I would simply have them first craft a EU-like arrangement for a few years."

"in some ways I am glad so many are leaving. The successful usually don't leave."

Certainly the one percent have good reason to stay-- CA itself is an awesome place-- and many are leaving due to lack of success.

That said, and I think this a central point, many of the successful are leaving as well. Indeed, the ratio of the successful to those on the dole I think must be declining rather sharply, though off the top of my head no citations come to mind.

As for me, I would much rather stay-- but the high unemployment rate and the closely related decline in discretionary income with its attendant decline in discretionary spending-- which unfortunately for me is how most wives see martial arts-- are really hitting the portion of my income based upon local spending.

LOS ANGELES — The weekend checkpoints set up along intersections here were always meant to catch those who had had too much to drink. In an operation intended to be equal parts deterrent and enforcement, the police would stop every car, testing drivers suspected of being under the influence of alcohol or drugs.

A driver being detained in 2010 for not having a license in San Jose, where an impound policy is less strict than in many cities.

But for years, advocacy groups have complained that the checkpoints unfairly targeted illegal immigrants, who cannot get driver’s licenses, ensnaring far more unlicensed drivers than drunken ones. And in March, the Los Angeles Police Department decided that it would no longer automatically impound the vehicles of drivers without licenses.

The change was a significant shift here in the country’s second-largest city, home to thousands of illegal immigrants who, like many other residents, see driving as the only viable way to move around a sprawling metropolitan area larger than Delaware and Rhode Island combined. And it is in marked contrast to debates in other places around the country where local governments are cracking down harder on illegal immigrants living within their borders.

Remember the Greek-style protests in Madison, the union sit-ins, the lawmakers who fled to Illinois to avoid voting on Scott Walker's collective-bargaining law last year? Now that the recall election of Mr. Walker is in full swing, Big Labor must be wondering where the outrage went.

Since last summer, unions have been throwing millions at defeating the man who reformed collective bargaining for government workers and required union members to pay 5.8% of their paychecks toward pensions and 12.6% of their health insurance premiums, modest contributions compared to the average in private business. As the May 8 Democratic recall primary nears to determine who will run against Mr. Walker on June 5, this should be their rhetorical moment ne plus ultra.

So, let's see. Milwaukee Mayor Tom Barrett, the front-runner, has focused his campaigns on jobs, education, the environment and "making communities safer." One of Mr. Barrett's ads singles out "Walker's War on Women," with nary a mention of collective bargaining. Former Dane County Executive Kathleen Falk is heavily supported by union groups, but even her issues list makes only passing reference to collective bargaining.

No wonder. Since Mr. Walker's reforms went into effect, the doom and gloom scenarios have failed to materialize. Property taxes in the state were down 0.4% in 2011, the first decline since 1998. According to Chief Executive magazine, Wisconsin moved up four more places this year to number 20 in an annual CEO survey of the best states to do business, after jumping 17 spots last year.

The Governor's office has estimated that altogether the reforms have saved Badger State taxpayers more than $1 billion, including $65 million in changes in health-care plans, and some $543 million in local savings documented by media reports. According to the Wisconsin-based MacIver Institute, Mayor Barrett's city of Milwaukee saved $19 million on health-care costs as a direct result of Mr. Walker's reforms. Awkward turtle.

Some of the good news has been in the schools, because districts have been able to avoid teacher layoffs and make ends meet because of flexibility created by the changes. In the Brown Deer school district, savings created by pension and health-care contributions from employees allowed the school to prevent layoffs and save some $800,000 for taxpayers.

In Fond du Lac, school board president Eric Everson says the district saved $4 million as a result of last year's reforms, including $2 million from the changes in employee contributions to their pensions.

Another 52 schools across the state saved an average of $220 per student thanks to the ability to introduce competitive bidding for health insurance, rather than automatically going through WEA Trust, the favored provider of the Wisconsin Education Association Council. If the savings are even half as large as the Governor's surveys indicate, they are still enormous.

All of this is making an impression on Wisconsin voters. According to a Marquette University Law School poll released Wednesday, only 12% of Wisconsin voters say "restoring collective bargaining rights" is their priority, which explains the Democratic decision to fight on other issues....Mr. Walker's reforms were a modest but necessary response to the state's fiscal problems, and the proof is in the emerging results. The union reaction was so ferocious because the reforms reduced Big Labor's clout over state and local taxpayers and thus its ability to milk taxpayers year after year without challenge.

Democrats and unions will still do all they can to recall Mr. Walker to prove to would-be reformers nationwide that unions can't be crossed. But it speaks volumes that Democrats are running on everything except their real goal—which is to restore the political dominance of government unions.

As a former Wisconsinite I don't disapprove of what Walker did, it's how he did it. What happened to the sanctity of a contract? Further his hypocrisy not to include the Fire and Police because their Unions voted for Walker also seems wrong.

That said CA needs to do something about it's public unions. The waste and fat is beginning to smell.

My daughter told me this morning that she hopes we will be able to stay in CA. She likes being able to go to the beach every day in the summer. So likes being able to ride horses 2x a week 20 minutes away, etc.

I take the liberty of moving PC's post in Liberal Fascism thread to here:===============

Woof, Socialism has scored yet another milestone in it's bid to destroy America.

California's budget deficit has swelled to a projected $16 billion — much larger than had been predicted just months ago — and will force severe cuts to schools and public safety if voters fail to approve tax increases in November, Gov. Jerry Brown said Saturday.

The Democratic governor said the shortfall grew from $9.2 billion in January in part because tax collections have not come in as high as expected and the economy isn't growing as fast as hoped for. The deficit has also risen because lawsuits and federal requirements have blocked billions of dollars in state cuts.

"This means we will have to go much farther and make cuts far greater than I asked for at the beginning of the year," Brown said in an online video. "But we can't fill this hole with cuts alone without doing severe damage to our schools. That's why I'm bypassing the gridlock and asking you, the people of California, to approve a plan that avoids cuts to schools and public safety."

Brown did not release details of the newly calculated deficit Saturday, but he is expected to lay out a revised spending plan Monday. The new plan for the fiscal year that starts July 1 hinges in large part on voters approving higher taxes.

The governor has said those tax increases are needed to help pull the state out of a crippling decade shaped by the collapse of the housing market and recession. Without them, he warned, public schools and colleges, and public safety, will suffer deeper cuts.

"What I'm proposing is not a panacea, but it goes a long way toward cleaning up the state's budget mess," Brown said.

Democrats, who control the Legislature, have resisted Brown's proposed cuts so far this year. Republican lawmakers criticized the majority party for building in overly optimistic tax revenues.

"Today's news underscores how we must rein in spending and let our economy grow by leaving overburdened taxpayers alone," said Assembly Republican leader Connie Conway in a statement.

The governor pursued a ballot initiative because Republican lawmakers would not provide the votes needed to reach the two-thirds legislative majority required to raise taxes.

Assembly Speaker John Perez, D-Los Angeles, acknowledged that lawmakers have "limited and difficult choices left to solve the deficit." Senate President Pro Tem Darrell Steinberg, D-Sacramento, said he wasn't surprised by the deficit spike given that state tax revenue have fallen $3.5 billion below projections in the current year.

"We will deal with it," Steinberg said Saturday. "And we know that more cuts are inevitable but we will do our very, very best to save more than we lose, especially for those in need."

Under Brown's tax plan, California would temporarily raise the state's sales tax by a quarter-cent and increase the income tax on people who make $250,000 or more. Brown is projecting his tax initiative would raise as much as $9 billion, but a review by the nonpartisan analyst's office estimates revenue of $6.8 billion in fiscal year 2012-13.

Supporters of the "Schools and Local Public Safety Protection Act of 2012" say the additional revenue would help maintain current funding levels for public schools and colleges and pay for programs that benefit seniors and low-income families. It also would provide local governments with a constitutional guarantee of funding to comply with a new state law that shifts lower-level offenders from state prisons to county jails.

A second tax hike headed for the November ballot is being promoted by Los Angeles civil rights attorney Molly Munger, whose initiative would raise income taxes on a sliding scale for nearly all wage-earners to help fund schools.

The governor is expected to propose a contingency plan with a list of unpopular cuts that would kick in automatically if voters reject tax hikes this fall. In January, he said they would result in a K-12 school year shortened by up to three weeks, higher college tuition fees and reduced funding for courts.

For residents of this U.S. state, things just got a whole lot worse Monday, May 14, 2012

From The Economic Collapse:

Why does the state of California seem to be so incredibly hopeless? These days, California can't seem to do anything right, and if you live in California, things just got a whole lot worse.

Governor Brown has announced that the state budget deficit for this year is going to be much larger than projected, that more government services are going to be cut, and that voters are going to vote on another round of tax increases in November.

Meanwhile, unemployment is sitting at 11 percent and extended federal unemployment benefits for workers in the state are ending. Because California is one of the worst places in the nation to conduct business, there has been a steady flow of companies leaving the state. Those companies have taken a whole lot of good jobs with them.

Due to the lack of jobs and a steady stream of impoverished immigrants coming in from Mexico and other countries, poverty in the state has exploded and crime is rapidly increasing. California may be the land of "endless sunshine," but for the California economy, there are only dark clouds on the horizon. The state is coming apart at the seams, and there is not much hope that things are going to turn around any time soon.

These days, California is very similar to Greece in many ways...

Read full article...

More on California:

Sixteen reasons to get out of this popular state immediately

Outrageous report shows California is desperate for cash any way it can get it

Wall Street Journal op-ed: California is making the same insane mistakes as Greece

Allysia Finley writing May 15 in the Journal's online Political Diary:

California Gov. Jerry Brown's revised 94-page budget isn't exactly a scintillating read, but literati might appreciate its irony. Just take the governor's narrative explaining why his January revenue forecast was $4.3 billion off the mark.

While overall personal income tax collections have increased modestly, capital gains revenues are down by 5% (after growing by 92% in 2010), and corporate returns have fallen by 14% over the past year. That's "atypical," the budget notes, because capital gains usually only slip in recessions, and national corporate profits are growing smartly. Mr. Brown, a Democrat, attributes the economic aberration to a "sudden and unexpected increase in the use of tax credits."

Of course, what he really means is that corporations are exploiting loopholes that legislators have carved out for their favored industries (solar being the biggest). Many businesses wouldn't play in California otherwise. High-income individuals, meanwhile, are likely seeking shelter from the state's confiscatory tax regime, which takes 10.3% of every dollar they earn. That could be in Texas or tax-exempt investments.

From the deficit crisis and the Christy Brown comparison and comments that Calif is different on 'Decline, Fall, and Resurrection of America' and discussions that we should be having about Scott Walker's reforms in Wisconsin, the question I would pose to JDN and all California centrists is: what should Calif be doing to fix itself?

What spending should be cut if any, what spending should be off the table. What rates should your property be taxed at. What income tax changes would actually bring in more money instead of chasing it away. Which regulations are excessive and ripe for repeal? What reforms should voters support and their representatives enact?----It's an easy question for conservatives (spend less, make the taxes and rules friendly again to business and wealth creation), but Calif is not populated with conservatives. To me it all comes down to basic principles of governance. You cannot control spending while you operate in an environment where most voters think that costs will be borne by someone else.

Passing it all on to the next generation only works if you close the exits.